Sainsbury rethinking Egypt business

Supermarket chain Sainsbury is reviewing its Egyptian business amid reports - which it denies - that the group is set to pull the plug on the loss-making operation.

The group's local partner, Edge, said Sainsbury is to close the business within three months, according to a local newspaper. A Sainsbury spokeswoman denied the reports but said the company was reviewing its strategic options in the country. A company source said Sainsbury's Egypt would release a statement on Wednesday commenting on the reports.

Sainsbury's Egypt made an operating loss of £10.2m on sales of £40.5m in the first half of 2000. It blamed the higher than expected losses on delayed store openings, local licensing difficulties and a deterioration in the trading environment in the region. The company said it was cutting back its development programme in Egypt.

Sainsbury faced opposition from local traders when it opened in Egypt earlier this year amid rumours that it was Jewish-owned. The chain suffered some vandalism at its stores in mid-October during student protests at Israeli suppression of Palestinian protests in the West Bank and Gaza Strip.